The Berkshire Beat: October 3, 2025
All of the latest Warren Buffett and Berkshire Hathaway news!
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Over the weekend, the Financial Times reported that Occidental Petroleum was exploring the sale of its OxyChem petrochemicals unit for around $10 billion. Like many of Occidental’s recent moves, this deal would be aimed at slashing the oiler’s debt pile that had swelled after last year’s CrownRock acquisition.
“The identity of the buyer,” the outlet noted, “could not immediately be established.”
That changed on Tuesday, when the Wall Street Journal unmasked the mystery suitor: Berkshire Hathaway. Sources claimed “the deal could come together within days”.
And so it did.
On Thursday, Berkshire announced the $9.7 billion purchase of OxyChem in an all-cash transaction that is expected to close later this year.
“Berkshire is acquiring a robust portfolio of operating assets, supported by an accomplished team,” said vice chairman Greg Abel in a press release. “We look forward to welcoming OxyChem as an operating subsidiary within Berkshire. We commend Vicki [Hollub] and the Occidental team for their commitment to Occidental’s long-term financial stability, as demonstrated by their plan to use proceeds to reinforce the company’s balance sheet.”
What is OxyChem? Occidental’s petrochemicals arm produces and sells essential chemicals “used in chlorinating water, recycling batteries, and producing paper”. And it does so quite well — ranking first or second in U.S. market share for each of its core chemical products. This year’s projected pre-tax earnings of $850 million are down from 2023’s $1.5 billion and 2024’s $1.1 billion, owing to declining domestic margins and slowing growth in China.
Occidental will use $6.5 billion of the purchase price to bring its debt back below $15 billion. That’s the finish line, so to speak, of the oiler’s current debt reduction efforts — and the number that Hollub had long pinpointed for when share buybacks would restart. (These were paused post-CrownRock.)
“We now have decades of development opportunity in oil and gas,” Hollub told CNBC yesterday, “so we wanted to look at ways to accelerate value to our shareholders.”
She called this divestiture — and its helpful impact on the balance sheet — the last step in the company’s major transformation. “Now, I think we’re off and running to value creation that is going to come at a much faster pace for our shareholders.”
In the same interview, Hollub addressed the bright future of domestic oil production. “What has happened in the United States is phenomenal,” she said. “There are ten other countries that have more oil resources than we do — yet we’re the largest producer in the world at 13.5 million barrels per day. And the reason for that is our shale development.”
“[The industry] believes we have about 1.5 trillion barrels of oil in place in the ground,” she continued, “and we’ve just got to get more of it out.”
Even though Warren Buffett is not quoted in the press release, it’s nice to know that he got (at least) one last decent-sized acquisition over the line before his retirement. And one other bit of welcome news: Berkshire will continue to collect 8% dividends on its Occidental preferred shares for a while yet, as the oiler says it doesn’t expect to start redeeming those until August 2029.
I will have much more on the OxyChem deal coming on Monday.
And, now, more of the latest news and notes out of Omaha…
Q3 2025 is in the books — and we now enter the homestretch of Warren Buffett’s legendary run as Berkshire Hathaway CEO. The end of an era is sadly in sight. And, if he wants to go out with another win over the benchmark index, Berkshire’s stock price needs to get moving. Through the third quarter, Berkshire’s 10.8% gain trails the S&P 500’s total return of 14.8%. (Just to head off any comments, I know he doesn’t care about such things as any single year’s price movement.)
Max Olson, who publishes periodic compilations of Berkshire Hathaway annual letters, has confirmed that Buffett will no longer write these letters after his retirement. In other words, the 2024 letter was his last. Not a huge surprise, but sad news nonetheless.
BNSF Railway came out swinging against Union Pacific’s proposed merger with Norfolk Southern — calling it “costly, unnecessary, anti-competitive, and bad for the U.S. economy”. The Berkshire-owned railroad laid the blame on Wall Street greed, insisting that no customers are clamoring for such consolidation. It also scoffed at UP’s rosy forecast of 10% volume growth, warning that shippers will end up footing the $85 billion bill through higher rates and curtailed services. And, in bold colors, BNSF reiterated that no bid for CSX will be forthcoming “at this time”.
This salvo once again shuts the door on CSX’s hopes for a merger with BNSF. Those dreams had already hit a wall back on August 3, when Warren Buffett and Greg Abel hosted CSX CEO Joe Hinrichs in Omaha — and told him they would not be making an offer for his railroad. That went over like a lead balloon with activist shareholder Ancora, who had been agitating for a merger, and Hinrichs ended up paying for it with his job. This week, CSX ousted its CEO and replaced him with Steve Angel, who Ancora believes will be more proactive in “identifying a willing partner to merge with”. Best of luck, but it won’t be Berkshire.
American Express CEO Stephen Squeri discussed the new-and-improved Platinum Card with Fortune. While some users might balk at the $895 annual fee, he pointed to the boosted perks and benefits that should keep cardholders hooked. “If you use the credits,” said Squeri, “you’ll get over $3,500 a year in value on both the consumer and business cards. At the [previous] $695 fee, that value was $1,500 a year on the consumer card. People are going to do the math. They’re going to say, ‘Wait a minute, you want me to pay [only] $200 extra for over $1,000 in additional value?’” AmEx also continues to shift its perk profile towards streaming, shopping, and restaurants — with new credits for Resy, Uber One, Lululemon, Disney+, and many more.
And a few odds and ends to finish off the week…
It’s been a busy few days on the dividend front. Berkshire collected $204 million in quarterly dividends from Coca-Cola, $26.2 million from Chubb, $1.8 million from Lamar Advertising, and $397,867 from Allegion.
Helzberg’s freshly-unveiled 2025 Engagement & Ring Shopping Survey reveals the delightful paradoxes facing young couples today. A yearning for intimate and low-key “yes” moments — preferred by 83% of respondents — juxtaposed with collaborative ring hunts and the inevitable social media splash.
“Couples want intimacy without uncertainty,” said CEO Brad Hampton. “A private, personal proposal supported by shared planning, clear education, and a ring that feels uniquely theirs.”
SPS Technologies, a wholly-owned subsidiary of Precision Castparts, shared plans for a new 350,000-square-foot manufacturing facility to replace the one destroyed in a four-alarm fire back in February. There, the company will manufacture high-strength nuts, bolts, and other products used in aerospace. “The aerospace industry counts on us to make unique parts no one else makes,” said PCC communications director David Dugan.
Olin trades at $6 billion EV with same revenue as OxyChem. Chlor-alkali (majority of OxyChem revenue) is inorganic, not a petrochemical.